Question: Let S = $75, r = 8% (continuously compounded),d= 3%,s= 20%, T = 0.5. In this situation, the appropriate values of u and d are

Let S = $75, r = 8% (continuously compounded),d= 3%,s= 20%, T = 0.5. In this situation, the appropriate values ofuanddare 1.11907 and 0.91622, respectively. Using a 2-step binomial tree, calculate the value of an $80-strike American put option.

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